IMF paper assesses impact of monetary policy on inequality

IMF headquarters in Washington DC

A working paper published by the International Monetary Fund (IMF) in August examines the impact of monetary policy on inequality in the US, finding that raising interest rates causes an increase in the gap between rich and poor.

The authors, Olivier Coibion, Yuriy Gorodnichenko, Lorenz Kueng and John Silvia, analyse household data from the US consumer expenditures survey for every quarter since 1980. The paper finds that a tightening of monetary policy causes income to increase at the upper end